The future couldn’t be bleaker. In the heels of Texas Instrument’s laying off of 400 workers in its Baguio facility, Intel announced the end of its 35-year old operations in the Philippines, laying off 1,800 workers. More dark clouds loomed after Labor Secretary Marianito Roque projected that there will be around 60,000 job losses in the electronics sector this year. The title of the article (“RP fears 60,000 IT job losses”) confused many, to the chagrin of some readers, but the truth is very clear: along with those job losses, the electronics industry — the Philippines’ largest export sector in terms of revenue — will suffer a corresponding hit, and so will the national GDP.
Unfortunately, job losses are not limited to the electronics industry — experts believe that Intel was only the beginning, and more companies in the Philippines will be laying workers off. Furthermore, OFWs themselves are being hit with layoffs, the worst of which was the loss of jobs of around 3000 workers in Taiwan.
The silver lining in this landscape of layoff despair is that the local IT (the internet and software part of it, not the hardware part) as well as the BPO industries are faring well, with some experts believing that the jobless can be absorbed by these industries altogether:
According to Lauro Vives, president and chief executive of research of XMG Asia Pacific, the IT and BPO sectors can absorb the displaced workers, provided they have the required skills.
Lack of jobs should not be a problem for the Philippines as there are activities that are in the pipeline in the IT and BPO sectors in the next few months, he said.[Inquirer.net]
This news was inadvertently supported by Citibank, which announced a significant expansion of so-called “knowledge process outsourcing” division in the Philippines.
Not all is bright and dandy in those industries either, however. In the same article, Accenture confirmed an earlier announcement that it laid some 500 Filipino workers off. It’s confusing, however, on whether those 500 were part of the call center group (as reported in the above article) or the solutions group (as rumored here).
And if you think the call center industry is safe, think again: late last year, Dell has started moving call centers back to the United States after constant customer complaints of having difficulty talking with Filipino and Indian call center agents. While the service has a higher price than Dell’s regular customer support services, it underscores the not-so-obvious fragility of the call center industry and how American customers receive non-American customer support agents.
Indeed the only lesson that we can learn above is that there’s no such thing as a safe haven in the world economic crisis that we’re experiencing today. There’s simply no way to play it safe, and perhaps it’s because it’s just not possible. In fact, some people survived and prospered by playing riskier cards in tough economic times, and some of the biggest local enterprises were born in the middle of the most dire periods in history (National Bookstore was established during World War II, and Jollibee started in the shadow of Martial Law, for example).
What is clear, however, is that a person has to keep his eyes peeled and his ear close to the ground, because in tough economic times, standing still and oblivious will be the surest way to perish.
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It would be interesting to see this month’s remittance figures.
As for Dell, I remember some colleagues who had over three hours of calls only to be passing it to a supervisor in the end.
I remmeber having this annecdote from the Cat while we were discussing call centers agents.(i was defending the callcenter agents,being an ex callboy my self)
That even pinoys in the US(like her) are having a hard time explaining to them that the garage is separate d from the house in the east coast.(when an agent asked her to check the cables in the garage)
I ended up agreeing with her.
One month crash courses on your product and the US culture is never enough.
niceblog.
I will start to retract comments I made over at mlq3s na dito palipat lipat lang ang mga call center agents at computer programmers and other IT professionals.
confirmation of a very bearish market:
The Yen dropped at its historic lows since 1995 last week. Momentum within 30 minutes of day trading 2 hours after NYSE opened , has dropped almost 2000 pips.
Another major US electronic retailer Circuit City with 567 stores nationwide has filed bankruptcy in November 2008 and will close all stores, laying off 30,000 employees after its final liquidation. All 767 Canadian stores will not be affected.
All brand name computers, plasma TV, stereos,cameras, home videos and other electronic products are sold in the store.
The giant retailer were able to secure $1.1 billion credit line to shore up its working capital base. Circuit City were hoping that during the holidays, it would pump up sales but unfortunately the economic climate was so poor that it has no choice other than liquidation.
I wonder what best buy will do and the newly launch Hhgreeg?
Parts and manufacturers are made in China, Japan and other Asian countries.
Healthcare is the only stable industry in the US for now. My doctor friends,nurses and therapists have no clues except trying to avail and refinance their homes at very low interest rates. I am sensing they are not as affected and may continue remittance to the Philippines but i’m not sure how much is coming from this industry.
I am hanging out at the wine bar often, becoming alcoholic. It was packed of people and socializing was normal. No one talked about the economy. I guess, everyone is in denial :)
01/12/2009
Satyam fall will boost Philippines BPO industry
I would rather the Philippines be chosen as a BPO venue not because they cannot trust India, but because Filipino services are at par or exceed the quality of service Indian BPO players can offer to foreign investors.
Correct me if i’m wrong, but didn’t Dell cut costs a few years ago and setup their own Call Center shop locally…?
Less slight on our local BPOs if Dell moves back to America its jobs because I think it speaks more of how poorly Dell is doing not just these days but for the past 5 or so years. Dell after all reported revenue and guidance 8.6% below Wall Street’s expectation. Contrast to Apple’s quarter-by-quarter growth of 28% as reported last week.
Of course.
And i agree with cvj, it would be nice to see remittance figures for the past quarter. There is no safe haven. the Philippines is feeling the global economic slowdown.
Dell’s captive center is still here, right?
Did Dell reduce agent manpower due to “constant customer complaints of having difficulty talking with Filipino…..call center agents”
I read the link. It never says anything about offshore call centers closing down, moving them back to the US.
All the link says is about Dell is its new ‘premium’ tech service guaranteeing an agent from North America.
anthony,
While I might have worded it in an ambiguous way, the truth is still clear: Americans are having a hard time talking with customer service agents with non-American clients.
And that is a Sword of Damocles on the “sunshine” industry.
Somehow, someway, our dependence on such side-value industries will have to end.
News about remittances is starting to come in.
yes its true that “Americans are having a hard time talking with customer service agents with non-American clients.”
but the effect (thus far) is not what your write-up implies
“And that is a Sword of Damocles on the “sunshine” industry”
um, not really. its no longer a ‘sunshine’ industry
“Somehow, someway, our dependence on such side-value industries will have to end.”
true
anthony,
LOL, that’s precisely why the word sunshine was in quotes. ;)